Genuine Progress Indicator - GPI

Probably all of us are familiar with the concept of the incomplete answer: we ask a question, and the information we get in response doesn’t quite tell us everything we want to know. For example, let’s say we come upon our toddler who is vigorously chewing something. Since we haven’t fed him recently, we’re instantly suspicious. “What did you eat?” we ask. “Uncle Charles gave it to me,” is his wide-eyed response, which gives us some information—at least he didn’t find something in the dirt at the playground at eat it again—but it still isn’t really answering our question.

For some economists, measuring a country’s GDP, or gross domestic product, also gives us incomplete answers. A nation’s GDP tells us how much money it made in a given year. This can be helpful, but if we really want to know how a country is doing on a deeper level, some argue that we need to look at something other than income. They say that just looking at GDP is like someone asking us how we are and us replying by telling them how much our salary is.

Enter the Genuine Progress Indicator, or GPI. While it too tries to measure economic growth, it does so by looking at more than just a country’s GDP. Its underlying theory is that a nation’s overall health is a lot more complicated than an income statement, and should factor in things like its physical environment, its social policies, the general wellbeing of its population, and its trades and investments. GPI is all about sustainability: is what we’re doing now going to help or hinder what we want to do in the future? For example, if a country in Asia is experiencing crazy high GDP growth as a result of its industrialization, but that same industrialization is also causing massive deforestation and leading to increases in incidences of pollution-related cancer among its people, then its GPI would take that into account.

We don’t have to choose one or the other. Countries like the United States measure both, though some states differ slightly in how they calculate certain things, like carbon emissions. The measuring itself can get complicated; figuring out the actual dollar amount attached to things like noise pollution, crime rates, and average workweek durations—all part of the GPI’s 26 indicators—is a lot harder than just looking up how much money we brought home last week. But if we’re really trying to understand how a nation is doing, really, in its heart and soul, then the country’s GPI just might get us the answers we’re searching for.